Lenders invite bids for settlement of debt of Matix Fertilisers

The eleven-lender consortium, which holds close to 70.74 per cent of the outstanding debt in the company, has agreed for settlement of the debt against the OTS offer based on the 'Swiss Challenge' process, according to a document issued by SBI Capital Markets (SBI Caps).

A consortium of lenders led by IDBI Bank has invited bids for settlement of their outstanding debt of around Rs 4,400 crore to Matix Fertilisers and Chemicals Ltd (MFCL) after they received a one-time settlement offer (OTS) from the company.     The eleven-lender consortium, which holds close to 70.74 per cent of the outstanding debt in the company, has agreed for settlement of the debt against the OTS offer based on the 'Swiss Challenge' process, according to a document issued by SBI Capital Markets (SBI Caps). Lenders have given mandate to SBI Caps for resolution of the outstanding debt of the company. "Interested lenders are considering soliciting bids via a competitive bid process based on 'Swiss Challenge Method' with the company offer (OTS offer) as anchor offer," the document showed. MFCL had submitted its OTS offer to lenders for settlement of all its outstanding debt on September 15, it showed

The company has an outstanding rupee debt of around Rs 3,222.55 crore and also has foreign currency loans or external commercial borrowings (ECB) worth USD 171.03 million, as per the document. MFCL has set up a gas-based greenfield urea manufacturing plant at Panagarh Industrial Park, West Bengal.     The plant has a capacity of 0.73 MTPA anhydrous liquid ammonia and 1.27 MTPA of prilled urea plants along with 54 MW captive power plant, a dedicated water reservoir, Railway siding, steam generation and other utilities.     The document said the plant was technically completed as per the implementation plan. However, due to inadequate supply of coal bed methane from Essar Oil Limited (EOL) and non-availability of alternative gas sources, the plant could not commence commercial operations as per the scheduled date of April 1, 2014.    The company started production from October 1, 2017 at nominal capacity but could operate the plant only for a period of 45 days and had to suspend operations for want of working capital and availability of adequate gas. "Since the ability of the company to service its debt obligation has been adversely impacted due to unavailability of gas and working capital, its lenders signed an Inter Creditor Agreement (ICA) on July 5, 2019 for resolution of the debt outstanding," as per the document.   Besides IDBI Bank, other lenders include State Bank of India Punjab National Bank, Axis Bank, Central Bank of India, Canara Bank, Bank of India, Bank of Baroda, IIFC (UK), among others.

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